What happens to your aircraft in a divorce? Pilots and aircraft owners may think more often about preparing their aircraft in the event of an emergency or an untimely death.
However, many aircraft owners consistently do not cover all their bases when it comes to a certain life event. Including your aircraft in your will or estate plan should take into account every possible thing like a potential divorce.
You follow other procedures and checks while maintaining records to better protect your aircraft while you own it. You should do the same in the event of a divorce where you may be forced to divide its value with your (ex) partner.
Contact our team of ASA Senior Accredited Appraisers to get started.
Why An Estate Plan Including Your Aircraft Is Essential In Case Of Divorce
What happens to your aircraft in a divorce? Plan your estate with a family law attorney who has experience in aviation. An aircraft isn’t your typical run-of-the-mill asset and requires specialization.
Understanding Marital Property vs. Separate Property
An aircraft is an asset like any other in a divorce. It’s treated with the same legal approach as if it were a car, boat, or expensive piece of jewelry. The difference lies within its distinction as marital property or separate property.
If you acquired ownership of your aircraft while married, it’s considered marital property and can be divided within the estate. Separate property is any aircraft you own before getting married. There may be a few exceptions to this rule. For example, an aircraft may have been previously agreed to be a spouse’s separate property because of a prenuptial agreement or inheritance. You should hire an attorney who knows family court laws to determine your exact legal needs.
Setting Up Correct Ownership
You’re familiar with having a title for your car and home. But you need one that accurately reflects proper ownership of your aircraft as well. You can do this in a few ways:
LLC Ownership
You may want to have your aircraft owned by an LLC for liability protection and to more easily share with co-owners. However, it’s incredibly important that all provisions include an operating agreement or separate buy-sell agreement to deal with its transfer when necessary.
Self Owned
An aircraft title with only your name has the potential to kickstart probate for proper transfer. Because even with just your name, an asset that’s considered community property still must be divided. Write a will or have an estate plan with clear instructions to avoid probate, if possible. The longer probate takes along with your divorce going unresolved, the longer your aircraft sits without the proper maintenance and care.
Trust Title
If your aircraft is owned by a trust, you can avoid probate and customize provisions however you wish. This may be an ideal option if you plan on leaving your aircraft to a single trustee.
5 Factors To Consider When Dividing Aircraft Assets
If you’re thinking about what to ask your divorce attorney, keep in mind the various factors a court may use to determine the division of all marital property.
1. Marriage Length
Depending on the length of your marriage and where you and your spouse live, you may need to refine your relationship further. For example, some states acknowledge common-law marriage (i.e. Texas, Colorado, Florida, etc.). This defines marriage as one without certain legal formalities, such as obtaining a marriage license or having a wedding ceremony.
2. Aircraft Value
Get an accurate idea of what your aircraft is worth by having it appraised by an ASA Senior Accredited Appraiser in aviation. When completed by a member of the VREF team, you can use this information to give to your lawyer so they can determine the actual value of your estate. This makes dividing it as an asset simpler to do if necessary.
3. Financial Circumstances For Each Party
Owning and operating an aircraft is a large commitment that few ever take on. With this in mind, dividing the value of an aircraft can quickly get complicated without proper legal plans in place. If left unresolved, you may lose your aircraft entirely.
To be the successful sole owner of your aircraft after a divorce, it’s wise to account for all possible fees and costs associated with aircraft ownership and operations in addition to legal expenses. Keeping your aircraft post-divorce may end up costing you more than you expected if you aren’t prepared.
4. Business Or Personal Use
Is your aircraft for business or personal use? It matters in divorce court as it relates to the division of assets, also impacting…
- How you and your spouse file for taxes
- Potential IRS audits
- Travel expense reporting
- Insurance needs and liabilities
- Ownership transfer for partners
- Aircraft registration
Again, clarifying ownership simplifies the process. This means a judge will want to know whether you own the business and/or aircraft alone or co-own it with your spouse.
5. Full Ownership Versus Co-Ownership
Agreeing to full ownership allows an individual or entity to own 100% of the aircraft, and co-ownership allows multiple companies to share ownership. Whether you want full, partial, or no ownership at all, it’s best practice to lay out the details in your most recent estate plans.
Contact VREF to get started on your aircraft appraisal.
What Is Aviation-Induced Divorce Syndrome?
Have you ever heard someone talk about Aviation-Induced Divorce Syndrome? It’s a common phrase and joke used to describe the impact of long-term air travel on marriages, typically for pilots.
The stress long-term air travel causes on one or both spouses can take its toll on a marriage with couples realizing their marriage simply can’t survive the distance, frequency, and related factors associated with frequent travel. Because many pilots also own private aircraft, this frequently told joke ends up pointing to a serious issue of knowing your legal options in the event of a divorce.
Making legal preparations for your aircraft sounds exhausting but will likely get you and your spouse to mediation much faster.
So if you are a pilot with your aircraft, we highly recommend you work with an experienced attorney to protect you in the event of divorce.
Top 10 States For Aircraft Ownership
Haven’t developed or updated your estate plans since your marriage? We suggest looking at state resources for the top 10 states for aircraft ownership in the country to get started:
Your Go-To For ASA Aircraft Appraisals
Don’t have a will or estate plan that includes your aircraft? Whether you’ve been pushing it off or otherwise delaying the process, including your aircraft in your will or estate plan offers some relief to those who may disagree about what to do with your property.
Worst case scenario? It’s not uncommon to see legal disputes turn into lengthy and bitter battles. The longer legal disputes go unresolved, the more expensive it gets. Ultimately, cases might end with the property sold at a loss.
Don’t take the chance. Contact us for all of your aircraft appraisal needs.
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
